What is the Average Cost of an Outsourced CFO?
If you’re operating a business, you might find that it’s a good idea to hire an outsourced CFO. However, your concern might be that this is a costly endeavor, that could damage your bottom line.
Let’s discuss everything that you need to know about outsourcing your CFO, by the end, you’ll understand how much it’ll cost you, meaning you’ll be able to make an informed decision that works for your company.
What is an Outsourced CFO?
Put simply, an outsourced CFO is an official that is tasked with dealing with the finances of your company. Of course, there will be other finance-related employees working for you, but the CFO simply has the most control over the finance sector of your company. They will provide leadership to help dictate the financial decisions among many different sectors of the company.
How Long Does an Outsourced CFO Work for a Company?
The length of time that a CFO stays employed with your company depends on how long they’re needed. Sometimes, CFOs will stay with a company for only a short period. They might work with a company on one project and then leave. However, sometimes CFOs are employed either part-time or full-time, with the intention that they’ll stay with the company for a while.
Why Would You Use an Outsourced CFO?
There are many reasons why you’d want to bring in an outsourced CFO to help with the finances within your company. For one, if you’re running a company that is expanding, you might find that you need a financial professional to help you make your decisions.
Also, if your current financial team isn’t operating as well as it could be, you might find that hiring a CFO is important because the CFO could act as a leader to help guide the current staff.
Finally, you might want to hire a CFO if you’re in charge of the finances within your company Sometimes, it’s best to outsource the labor to someone with no emotional ties to the company. This way, you’ll have an objective point of view, and the load that comes with dealing with finances will be taken off the person who runs the company.
What’s the Difference Between an Outsourced CFO and a Full Time CFO?
A full-time CFO is someone who is an employee of the company, and they will usually get benefits, stock options, a full-time schedule, and vacation time. That is, a full-time CFO gets all the perks of being hired for a full-time role with a company.
An outsourced CFO might work for a company full-time, but they are not intended to work with the company forever. Although they might work with a company for a long time, they are simply contracted to help the company grow. Oftentimes, outsourced CFOs are working on their projects or other contracted jobs. This means that they might not be able to devote all their attention to your company, but it also means that you’re going to have to pay them less than you would a full-time employee.
How Much Does it Cost to Hire an Outsourced CFO?
The cost to hire an outsourced CFO varies, but it is substantially less than the cost of hiring a full-time CFO, which often begins at around $175,000 a year—not counting bonuses and other incentives.
For an outsourced CFO, you’re going to pay around $1,000 to $12,000 a month, depending on the amount that they work and the caliber of your company. Finally, be sure to negotiate a rate and a contract before you start working with an outsourced CFO, to make sure you’re on the same page with pricing.